Africa: Cotton Producers Demand Results

Editor's Note

Two years ago in Cancun, the issue of the damage done to African cotton producers
by rich-country subsidies sparked the breakdown of world trade talks, highlighting the
failure of rich countries to make this round of trade talks a "development round."
In Geneva last week, African countries warned that their interests were still being ignored.

This AfricaFocus Bulletin contains a report from Third World
Network on the statements by cotton-producing countries at talks in
Geneva, a more general report from Focus on the Global South on
developing country views of the stalled talks, and excerpts from
another report from Third World Network on the latest negotiations.
For previous AfricaFocus Bulletins on trade issues, and additional
links, visit http://www.africafocus.org/tradexp.php

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

African Cotton Countries Demand Concrete Results at Hongkong

Representatives of the West African cotton-producing countries have
demanded a concrete resolution of the cotton problem at the Hong
Kong Ministerial Conference, as well as a clear indication now
that this will be the case, if they are to have any stake in
outcomes of the Conference.

Speaking to the press at the WTO on Wednesday, the West African
countries said that in the absence of such concrete results, the
developed countries whose policies have led to the cotton crisis
will be responsible if the cotton countries are unable to accept an
overall deal in Hong Kong.

The message was delivered by the Ministers of Trade and Industry of
Mali and Chad, the President of the Burkina Faso National Union of
Cotton Producers, and the President of the Cotton Producers
Association of Africa.

Introducing the issue at the press conference, the Malian Minister,
Mr Choguel Kokalla Maiga, said that the African cotton producers
have no choice but to demand a resolution of the cotton problem.

Resolution of their problem is their single interest in the
on-going negotiations, compared to other countries which have
multiple interests that can be traded off. He explained that their
countries are dependent on the single commodity of cotton, whereas
the EU and the US have other products available to them, and they
also have the means to resolve the crisis arising from their
policies.

Explaining the strategic role of cotton in their economies, Maiga
stated that cotton constituted 40% of total exports of their
countries, 60% of agricultural exports, and up to 10% of their GDP.

The minister recalled that when they brought up the cotton issue in
Cancun, there had been no solution. Since Cancun, there had been a
lot of discussion and workshops on the cotton issue, but again
there was no progress up to now.

In July 2004, as part of the July framework, WTO members agreed to
treat the case of cotton specifically, expeditiously and
ambitiously. But up to now there is no understanding of what these
terms mean, in terms of operationalising them.

Although there were only a few weeks before the Hong Kong
Ministerial, there was still no solution.

The principal countries especially the US and EU have all submitted
proposals on agriculture, and yet not one of these have even
mentioned the case of cotton. "The cotton countries are thus faced
with the risk that the Hong Kong Ministerial will offer us only
empty words and we will leave empty handed from Hong Kong. This
will be unacceptable," he stated.

The cotton countries, therefore, need a clear statement before
members arrive at Hong Kong as to how the Hong Kong meeting will
address the cotton issue, said the Minister, adding that a concrete
and operational resolution to the cotton problem must be part of
the decisions taken at Hong Kong, otherwise the countries cannot
see how they can have an interest in those decisions.

"We don't want to be held responsible if there is a failure in Hong
Kong," he said, adding that the US, EU and other countries had the
means to prevent a failure.

Asked whether this meant that the countries are prepared to block
a deal in Hong Kong, the Minister explained that it is not up to
any particular country to take upon themselves the responsibility
to block negotiations. However, a negotiation can be blocked as a
result of the failure to find solutions to legitimate problems. "If
there is no solution, we cannot see what our interests will be in
the negotiations," he reiterated.

He stated further that their countries are being put in the
unacceptable situation of having to chose between blocking a deal
in Hong Kong or accepting a bad deal. He said that their demands
were perfectly legitimate. They were not asking for any special
treatment or favours, but simply asking that the rules of the WTO
be applied.

Asked further to comment on the US argument that subsidies on
cotton were not linked to the production and on the issue of box
shifting, the Minister stated that debates about the colours of
boxes was interesting as an intellectual exercise but is of little
relevance to the cotton countries. "If other farmers (in rich
countries) are getting large subsidies, then whatever colour the
subsidies are said to be - whether blue or amber or green - makes
no difference."

The relevant question, he said, is whether "we can or cannot
produce for the international market, due to these subsidies."

Mr. Maiga said the countries' demands are that a clear date be
fixed to completely eliminate the subsidies, and that in the
meantime, their producers must be compensated for the huge losses
they have suffered from the subsidies.

He criticised the big countries for being concerned in the current
negotiations with solving their own problems, and then they ask the
small countries to accept whatever they have decided. "We can't
accept this," he stressed.

Mrs Ngarmbatina Soukate, Minister of Trade and Industry of Chad,
stressed that what their countries were looking for in the WTO is
the resolution of the cotton issue. "It is our life," she said.

She added that it was important for their countries to know before
going to Hong Kong that they will come back with concrete results,
otherwise their countries cannot even dare to go to Hong Kong. "We
don't want declarations, we need something concrete to give to our
farmers," she stressed.

There had been a lot of sympathy in words so far, she added, but no
concrete measures to address the issue.

Quoting an African proverb that people who are hungry do not need
philosophy but action, she stated that the cotton countries need to
be able to explain to their farmers after Hong Kong what the OECD
countries are willing to do to reduce their subsidies and what that
will mean for the farmers.

"This is why we are here at the WTO, we plead to all concerned to
stop beating around the bush and instead tell us what you are going
to do."

Ibrahim Malloum, President of the Cotton Producers Association of
Africa, drew attention to the fact that cotton produced in West
Africa is of the highest quality and had very competitive costs. It
was linked to the lives of over 15 million, but unfortunately,
instead of leading to the development of the people, cotton has
become part of their impoverishment due to the low prices which the
producers receive as result of the subsidies paid to cotton
producers in the OECD countries.

"In the OECD countries, production is not influenced by market
forces, as the farmers get a good price whatever the prices in the
market. We are facing unacceptable competition," he said.

He said that at the WTO Cancun meeting, everyone had accepted that
their countries had made the moral and legal case for redressing
the situation. He reiterated that the cotton countries are asking
simply for the rules of the WTO to be applied.

He added that there are four issues to be addressed in Hong Kong:
( 1) urgent action on domestic and export subsidies; ( 2) a date
to be fixed for an end to all subsidies; ( 3) a decision to
compensate the cotton producers for the huge losses they have
suffered as a result of the subsidies, which he estimated as $250
million in direct costs and $1 billion including indirect costs;
and ( 4) cotton must be treated outside of agriculture as it is a
strategic case.

In a similar vein, Mr Francois Traore, President of the Burkinabe
National Association of Cotton Producers, stated that cotton was
strategic for the development of their people.

He said the Western countries should be supporting the development
of cotton in African countries so that the people can have a
livelihood and stay in their own countries. Instead, the Western
countries seem to prefer the present situation in which their
subsidies destroy the prospects of the African cotton-producing
countries, whose people are then forced by circumstances to
migrate, and then they are forcibly repatriated.

He stated that it would be better to stay in Hong Kong after the
Ministerial than return with an empty hand.

Ag Talks: African and Caribbean Delegates Angered by US Package
Portrayed as "Progress"

"What the US has done is deceptive and misleading", delegate of a
small country to the WTO, denouncing the public relations spin
that the US and EU had made huge concessions.

In informal conversations with African and Caribbean delegates to
the WTO, many countries have expressed anger at the public
relations spin of the United States and EU, portraying their offers
as huge concessions.

And they have reason to be. The current WTO defined "trade
distorting subsidies" provided by the United States amount to about
$21.5 billion. With the implementation of the US proposal, the US
would still be able to provide up to about $23 billion in "trade-
distorting" supports. (Note that these figures do not include the
$51 billion US provides in the unlimited "Green Box", and the
cotton panel has already established that certain payments in this
box are trade-distorting.)

Two instruments that have allowed this "deception" to take place
are:

The sacrosanct Green Box, where the bulk of subsidies will be
housed, has been left untouched in these proposals. The US wants
an expansion of the Blue Box which will allow them to announce
cuts in the Amber Box, but shift a large portion of those reduced
subsidies around 5 billion into the New Blue Box.

The result? Whilst export subsidies are said to be on the way out,
hidden export subsidies have taken their place, and dumping in
developing country markets continue. Small wonder that African and
Caribbean delegates are incensed that these cosmetic "concessions"
have been given so much fanfare at the WTO and in the press in the
past week. Swirling all around them at the WTO is talk by the
prominent players that "progress has been made".

These are some comments heard in the corridors made by the
Africans and Caribbean delegates, gravely concerned by these
developments:

"There seems to be this notion of progress. But I don't think in
reality that progress is there. I don't think developing countries
should be rushing into contributing to the process. The picture is
being portrayed that we are moving. Everybody should come on board
to move. We should say, "There is no movement". US seems content
that the proposal has increased momentum, that if not for their
proposal, nothing would have moved. They are expecting us to
congratulate them. But there is nothing to congratulate about".

An African delegate, worried about the demands placed on them
regarding market access cuts said,

"What is worrying is that the level of ambition (in market access
/ tariff cuts) is rising from the US and EU. I don't know if this
is where some developing countries want to head. Those who feel it
should go down should come in and say something. We are not seeing
commensurate levels of ambition rising in export subsidies or
domestic supports. We have no justification to raise levels in
market access."

Many delegates have also expressed concern that whilst the market
access talks have accelerated, discussion on the defensive
instruments for developing countries (Special and Differential
treatment S&D) have not:

"The prominent players are arguing that we need to knock together
the main components, then deal with S&D (referring to the Special
Products and Safeguard Mechanisms) because they don't know what
the commitments by developing countries will be. But that is
dangerous. Given the time factor, we will be rushed into S&D
components, but not really get what we are looking for. We need to
have these commitments addressed in parallel, otherwise, the
results would be detrimental".

The African delegates have also underlined that they want cotton
and commodities two key concerns of theirs - to be addressed,
yet there has been no progress in these areas. One delegate also
expressed great concern, indignation and anger that the Chair of
Agriculture had suggested to those who had put forward a paper on
commodities, that this issue could be deferred till after Hong
Kong.

An African delegate characterized the events as a "backward
movement, not a forward movement".

A Caribbean delegate underlined, "I'm disappointed in what is being
sold as 'concessions'", and an LDC African country, referring to
the date of 2010 given by the US regarding the elimination of
export subsidies, wondered why we should be content with five more
years of export subsidization. "We should ask for the immediate
removal of export subsidies", he said with indignation, referring
to the farmers at home that have lost their livelihoods as a
result these supports.

"Blame game" follows failure of FIPs Ministers' meeting

The WTO preparations for the Hong Kong Ministerial conference
suffered a serious setback Wednesday night when a key meeting on
agriculture involving Ministers of five major countries - the US,
EU, Brazil, India and Australia - ended abruptly after failing to
make any progress. The session scheduled for Thursday was
cancelled.

On Thursday, a "blame game" took place, with some of the so-called
"five interested parties" (FIPs) having press conferences and
statements in which they disclaimed responsibility for the failure,
and sought to place the blame elsewhere.

"It may not have been a collapse, but it was close to a collapse,"
said one developing country diplomat, describing what happened at
the Wednesday talks.

The meeting had been attended by the US Trade Representative Robert
Portman, EU Trade Commissioner Peter Mandelson, Brazilian Foreign
Minister Celso Amorim, Indian Commerce and Industry Minister Kamal
Nath and Australian Trade Minister Mark Valle.

A significant development Thursday was the decidedly downbeat
assessment by both Portman and Mandelson on where the Doha talks
now stand, following the failure of the FIPs meeting. ...

According to trade delegates, the Wednesday FIPs meeting floundered
mainly because of the inability of the EU to make any new offers in
the market access pillar of agriculture. The offer made by
Mandelson the previous week on how far the EU could go to cut its
tariffs had been rejected by the others as too weak. ...

Earlier, at a Wednesday afternoon press briefing, before the FIPs
meeting, Amorim had been asked to respond to reports that Mandelson
had said that the EU could not move in agriculture unless other
countries make more concessions in other areas such as NAMA and
services.

Amorim said he could understand that everything is conditional on
what happens in other areas. "But we would be wary of any attempt
to make a smokescreen to prevent an advance on agriculture."

He said Brazil would not refuse to discuss other issues, but the
real negotiations in these other areas can take place "when we have
a real shape in agriculture." He added: "It would not be possible
to move in these other areas even to test flexibility in these
areas, if we don't have clear signals in agriculture."

An Indian Commerce Ministry press release on 20 October described
the world trade talks as being "deadlocked" over agriculture, after
the key ministerial meeting. ...

Meanwhile, at another press briefing later Thursday, the Foreign
Minister of Brazil, Celso Amorim, said in reference to the enlarged
FIPs meeting taking place Thursday, that "we are at a crucial
moment."

Speaking only on behalf of Brazil, Amorim said that while the round
is a single-undertaking, its engine remains agriculture and the
starter at this moment remains market access in agriculture.

He said that while the US proposal on domestic support is an
important step, it was an insufficient one.

What is needed now in the round is an important move on market
access that will help others to move, and also help the US to move
on domestic support.

Other aspects also have to be discussed taking into account that
this is a development round. The round is not a machinery to
extract concessions from the developing countries, he said.

Referring to some remarks that had been made that there was now a
deadlock, Amorim said that he preferred to speak of a 'padlock.'
"And the key to the padlock is in the hands of the EU."

Note: This report received inputs from Kanaga Raja. It was
published in SUNS Bulletin, 21 Oct 2005

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